The United States of America dollar, on Wednesday, June 21, pulled back from one-month highs against a basket of currencies as tumbling oil prices pushed down U.S. yield
The dollar index against a group of major currencies was 0.05 percent lower at 97.699. It had hit a one-month high of 97.871 on Tuesday as expectations that the U.S. Federal Reserve, which hiked interest rates last week, would tighten policy again in 2017
The greenback’s advance, however, stalled as the dollar-supportive bounce in U.S. Treasury yields was cut short overnight.
Following a big drop in oil prices, the 10-year Treasury note yield fell sharply on Tuesday, reversing a large portion of the gains it made after the Fed left the door open for another rate increase this year.
“U.S. inflation indicators have not been strong to start with. Now that oil is falling, it could add further pressure to the dollar by weakening sentiment towards the U.S. energy sector.”
The euro was steady at $1.1137 after retreating to a three-week low of $1.1119 overnight. The dollar was down 0.2 percent at 111.220 yen, off a near one-month peak of 111.790 touched on Tuesday.
While the U.S. currency’s advance may have stopped, some expected the losses to be limited, with the dollar seen eventually resuming its move higher.
The pound was little changed at $1.2630. The currency had slid 0.9 percent overnight and plumbed a two-month trough of $1.2603, Reuters reports.
Sterling wobbled near two-month lows after BoE’s Carney said on Tuesday that now was not the time to raise UK interest rates. Last week three out of eight BoE policymakers voted in favour of a rate hike and raised hopes for a near-term tightening.
The Norwegian crown languished near a five-week low against the dollar after falling about 0.5 percent on Tuesday.
The Canadian dollar, which fell about 0.35 percent overnight, extended losses to trade at C$1.3277 per dollar.
